Aziz Company sells two types of products, basic and deluxe. The company provides

Question

Aziz Company sells two types of products, basic and deluxe. The company provides technical support for users of its products at an expected cost of $310,000 per year. The company expects to process 10,000 customer service calls per yea Required: 1. Determine the company's cost of technical support per customer service call. 2. During the month of January, Aziz received 610 calls for customer service on its deluxe model and 310 cals for customer service on its basic model. Assign technical support costs to each model using activity-based costing (ABC)

Explanation / Answer

1

Given details:

Expected calls = 10,000

Expected cost = 310,000

Cost of technical support per service call = expected total cost / expected total calls = 310,000 / 10,000 = 31 per call

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